JUDGMENT : 1. Heard Mr. D.N. Kukday, learned Counsel for the appellant. None appears on behalf of the respondents. 2. The appellant, by this appeal, questions validity and legality of the Judgment and Award dt.31.10.2003 passed by the Motor Accident Claims Tribunal, Nagpur in Claim Petition No.588 of 1999 whereby compensation was awarded in the sum of Rs.6,99,542/- inclusive of compensation for no fault liability along with interest @ 9% p.a. from the date of petition and further direction was given that, in the event compensation is not deposited within 45 days from the date of order, interest would be chargeable @ 12 % p.a. from the date of petition till the amount if fully satisfied. The learned Counsel for the appellant submitted that the impugned Award enhancing rate of interest by way of penalty is unsustainable in law and ought to be quashed and set aside. 3. The brief facts are as under : One Vishnu Bhagwat working as a Pump Khalasi with W.C.L. at Patansawangi Mines had come to Nagpur on 29.12.1998. While returning by a private vehicle to his village, the offending motor vehicle i.e. Tata Sumo bearing registration No.MP-28/A-0943, which was driven rashly and negligently, hit the deceased. In that accident, said Vishnu Bhagwat died. According to the learned Counsel for the Insurer, no liability would arise against the Insurer as the offending motor vehicle mentioned in the F.I.R. was MH-31/9434 while in the charge sheet it was mentioned as MP-928/A-0943. It is contended that, due to such disparity in police papers, the Insurers ought to have been exonerated from liability. Alternatively, it is submitted that penal interest imposed against the Insurer for violation in payment of the amount within time fixed by the Tribunal is contrary to law. 4. Reference is made to the ruling in the case of National Insurance Co. Ltd. vs. Keshav Bahadur and Others reported in I (2004) ACC 581 (SC). In that case, the National Insurance Co. Ltd. had questioned the Judgment and Order dt.1.2.2002 of Jharkhand High Court at Ranchi in A.O.O. No.127 of 1997 (Civil Appeal No.399 of 2004, dt.20.1.2004). The Hon'ble Supreme Court observed that default rate of interest had no legal basis in the absence of finding regarding legality of the defaulter rate to be imposed against the Insurer Company. The ruling was in connection with Section 95 of the Motor Vehicles Act, 1939. The Hon'ble Supreme Court observed that default rate of interest had no legal basis in the absence of finding regarding legality of the defaulter rate to be imposed against the Insurer Company. The ruling was in connection with Section 95 of the Motor Vehicles Act, 1939. Grant of interest was held discretionary u/s. 110CC of the said Act (corresponding to Section 121 of the Motor Vehicles Act, 1988). It cannot be disputed that judicial discretion ought to be based upon sound reasons. According to law, it cannot be arbitrary, vague or fanciful, but must be legal and regular. Discretion to award interest must also be guided by sound reasons according to law. In the ruling of National Insurance Co. Ltd. (supra), the Apex Court held that Insurer cannot withhold awarded amount indefinitely. The claimant can claim interest as a matter of right but once award of interest is made at a particular rate and from very particular date, there would be no scope for retrospective enhancement of rate of interest on the ground of default in payment of compensation. Such a direction to be given effect to in the award for retrospective enhancement of rate of interest on the ground of default in payment of the compensation awarded together with fixed rate of interest payable thereon virtually amounts to imposition of penalty which is not statutorily envisaged and prescribed. That being so, the interest in that case was awarded only @ 9 % p.a. on the sum of compensation awarded as liability of the Insurer to pay from the date of claim. 5. There is no any counter claim regarding enhancement of compensation. Considering that there was adequate evidence on record to the effect that deceased Vishnu met his death in a motor vehicle accident that occurred on 29.12.1998 caused by rash and negligent driving of Tata Sumo bearing registration No.MP-28/ A-0943, compensation was awarded as follows : 1. Damages for loss of dependency a. The monthly pay of the deceased : Rs.8,768/- b. Deduction towards professional tax : Rs. 120/- c. Annual loss of dependency x 12 /Rs.1,03,776/- d. 1/3rd deduction towards personal expenses. : Rs. 34,592/- /69,184/- e. The multiplier of 13 is applicable : x 13 / Rs. 8,99,392/- f. 25 % deduction towards accelerated payment : Rs.2,24,848/- Damages for loss of dependency : Rs.6,74,542/- ii. Damages for loss of consortium : Rs. 10,000/- iii. 120/- c. Annual loss of dependency x 12 /Rs.1,03,776/- d. 1/3rd deduction towards personal expenses. : Rs. 34,592/- /69,184/- e. The multiplier of 13 is applicable : x 13 / Rs. 8,99,392/- f. 25 % deduction towards accelerated payment : Rs.2,24,848/- Damages for loss of dependency : Rs.6,74,542/- ii. Damages for loss of consortium : Rs. 10,000/- iii. Damages for loss of love & affection : Rs. 10,000/- iv. Damages for expenses incurred : Rs. 5,000/- Total damages : Rs.6,99,542/- 6. No interference is warranted in the Award of compensation as it appears to be proper and reasonable. The amount in the sum of Rs.6,99,542/- was payable by Shankar Fulchand Gupta and United India Insurance Company Ltd. jointly and severally together with interest @ 9 % p.a. from the date of petition. However, the increased rate of interest if the appellant and the owner of the offending motor vehicle default in paying the compensation @ 12 % p.a. giving it a retrospective effect is contrary to sound exercise of judicial discretion in the absence of recording any reasons and finding to that effect to impose additional and penal interest. I agree with the learned Counsel Mr. Kukday that such penal interest @ 12% p.a. ought not to have been imposed against the appellant by the Tribunal without being satisfied that compensation was not paid and delayed deliberately for default to pay it within time. Therefore, the impugned order to that extent is modified. Imposition of condition as to penal interest @ 12% p.a. as mentioned in para no.3 of the Award is quashed and set aside. Rest of the impugned order shall stand as it is. It is made clear that I have not expressed any opinion on power of the Tribunal executing Award to impose higher rate of interest for deliberate withholding and delay in payment of compensation awarded by the parties concerned liable to pay the compensation. 7. The Appellant, Insurer and owner of the offending motor vehicle shall jointly and severally pay a sum of Rs.6,99,542/- together with interest @ 9 % p.a. from the date of petition till realisation. The direction as to apportionment and distribution and deposit of the compensation payable is maintained as it is. 8. The appeal is partly allowed and disposed of accordingly. The record and proceedings be sent back to the Tribunal.